In my state (both parents were teachers), my parents paid 7% of their income as a contribution to their pensions. At this point, the contribution level is about 1/5th the cost of the pension.While I appreciate that my teachers' pension is a wonderful thing, may I challenge Trainee's quote? The teachers pension is not subsidised by the government. Teachers pay quite a large chunk of their income into supper-an and employers pay a massive amount, I when I was still at school our contribution was 6% and the schools 13% of my income. This is why a lot of private schools are now trying to leave the scheme. My pension is paid from current contributions by colleagues still at the chalkface. Indeed I believe recent increases to teachers' contributions have put the scheme into surplus.
When I started teaching in 1975, an older colleague took me aside to give me his view of the scheme, which he considered a total rip off. He pointed out the fund was massively in surplus, as the average length of retirement of a teacher retiring at 65 was only 18 months. Indeed many of my colleagues, didn't even reach retirement (staff rooms were like smoking carriages on the trains of the day) only their widows were able to claim a half pension. Happily now things have changed and I have calculated, by the rate of actuarial reduction, teachers are expected to have an average of 15 years of retirement.
We (both teachers) retired on a half salary, I was surprised that we managed our modest lifestyle quite comfortably. The bonus was no longer paying national insurance (how long will that last?) or super-an.
I hope Trainee is wrong about our circumstances when we are in our 80s (in 10 years).
Don't get me wrong, I realise we are in a very privileged position, though as eribaMotters pointed out I feel we earned it.
So do I! I apologies unreservedly if I came over as anti - teacher. Probably I'm just jealous.I hope Trainee is wrong about our circumstances when we are in our 80s (in 10 years).
More realistic pattern you had. The oft given retirement advice online "you're saving too much for retirement!" is given assuming you never cease contributing, you work 40 straight years, nobody has disability or sudden cash needs, and that your income level stays the same.I also opted out, at about 25/26 (think trainspotting) ................... not by choice, more by dubious brain changing choices, which although pleasurable for a while took me to hell and back, I joined life again (as most people see it) at 34.
Bobsame here, my anxieties can be a killer at times.
Your first problem is that they keep moving the retirement age, I dare say yours will be nearer 70 and so even more reason to think ahead. Before retirement you should be aiming for financial stability, a key milestone for retirement but I can understand the issues with cost of housing and living your generation face today.I am still 30 years from state pension age so this talk of retirement is just wishful thinking for me at the moment. For my generation I don't think there will be much of an extravagant retirement given the cost of housing and very few having a final salary pension.
That is the only way to do it, turn it into a big picture that you can visualise and then work out the must pay, needs and then wants and you have the right idea of spending to enjoy a lifesyle because there is no point having a great big pot of money when your body is not upto doing what you could have. One good reason not to do the lottery because sods law says you will probably win when you are proped up on a zimmer frame, peeing your pants and being fed and so to old to reap the rewards.I analysed our annual spending, which is always scary, lol I then created a massive spreadsheet of every investment we had to find out our total net worth, then classify investments into pensions ISA's shares and other investments to see what income might be generated. Pension funds and managed investments vary between 3% to 10%.
I then did a what-if analysis on different draw down methods based on different returns and different draw down times. An annuity is not an option for me. My wife was lucky to have a really good annuity from her work pension.
Rather than think about how long I would survive, I worked on how long will I be capable/willing to enjoy a lifestyle where I would spend that amount of money.
You have to define poor, if there is more to life than just money then you could be lifestyle rich but cash poor. I often look around and see so many unhappy looking faces but they are driving expensive cars, coming out of large expensive properties and really should be smiling if wealth gives true happyness. Read the book written by some Tibetan Deli and it will make you think, he thinks many people chase happyness through materialism but it only delivers short term relief until the next purchase, also on Tv you see people who are obviously very poor and work hard just to survive but they manage to smile, they are content with their lot and not wanting all the time for more like so many in the west.I am, and will continue to be, very, very poor in UK terms,
Sorry to hear about the cancer, hope treatment goes well. Cannot agree more on Annuities, good idea back in the day but no more, but investing in property I would question as I also looked into that domain but ran, figures did not add up. Hand over £100K and get it back at £475 a month, this will take 17 years to get the cash back not taking into account maintanance, insurance and income tax so I would rather spend the 100K over that period. Don't take it the wrong way but you are 72, that to me is time to just spend and enjoy anything and everything without tying money up in bricks, you have done your stint at grafting so just enjoy life and keep away from stressful things and again all the best getting rid of that cancer.Annuities absolutely no as they are just a form of robbery. We will be drawing down cash from my pension pot as well as investing in property.
That's me, that is.lifestyle rich but cash poor.
Yes I want him to be prepared and happy.How does your business partner feel about it Bob? You are giving 4 years of notice so it isn't a sudden thing, is he concerned, sees it as an opportunity or given no indication at the moment?
1. Employ a Manager on circa £25K - £30KYes I want him to be prepared and happy.
We have been great mates for nearly 25 years.
He will carry on in some form or other.
The idea is to bounce ideas around for a few years as to how we do a fair "split". I'm not greedy and more concerned he can carry on and earn a decent income.
I looked at that as well Roy and didn't go for it either even though I could have bought something very run down and refurbished through my business however it's not quite as you state, the property value would unless something went very wrong, retain the purchase value or more likely increase so any profit from the rental after expenses has to be viewed in a similar way as you would interest on savings.investing in property I would question as I also looked into that domain but ran, figures did not add up. Hand over £100K and get it back at £475 a month, this will take 17 years to get the cash back not taking into account maintanance, insurance and income tax so I would rather spend the 100K over that period. Don't take it the wrong way but you are 72, that to me is time to just spend and enjoy anything and everything without tying money up in bricks, you have done your stint at grafting so just enjoy life and keep away from stressful things and again all the best getting rid of that cancer.
I would say when you really start thinking about it. My thoughts, would not take an annuity, check your pension provider, take the 25% tax free lump sum and use that until it runs out, then drawer down annually on the balance. One thing i would do is check all the T&Cs of your provider, i found out with one of mine that when i popped my clogs 50% of the pot goes with it! have a very boring pension with the Pru now, whatever is in there goes to the missus and when her numbers up the kids get it. Still all kinds of things you can do with business premises etc that may be worth a look atThis is mainly aimed at business owners and the self employed.
Question is when do you know you have enough to retire.